Thursday, September 06, 2012

Helen Kelly is right and wrong.

The president of the Council of Trade Unions says the Government has broken a pledge to create more jobs.”

What rot.

Look, its clear that political opponents are going to use rising, nagging, seemingly incurable unemployment as a club to beat incumbent political leaders around the head. It’s always the economy, stupid.

That’s why even Obama cheerleaders are embarrassed by the fact admitted by their luminaries that in answer to the question:“Are you better off now than you were four years ago?” the only factual response is “No, we’re not.”

Same here.

But as Jonah Goldberg points out, the idea that politicians and presidents ‘run’ the economy is both ludicrous and fairly novel

As much as it pains me to say it, Ronald Reagan deserves some of the blame for the notion that our individual successes and failures are wholly contingent upon the whim of the guy in the Oval Office. He was the one who popularized “Are you better off now than you were four years ago?” to such devastating effect against Jimmy Carter. Since then, Democrats have made their own use of this crude reductionism. It has always struck me as a secular form of medieval thinking. My crops will not prosper unless the high priest wills it so.
   
At least Reagan argued that the economy would prosper if he were allowed to liberate it from the scheming of self-styled experts. Clinton ran out in front of a parade of free-market successes and, like Ferris Bueller, acted as if he was leading the parade.
   
In his manifest hubris, Obama believed it was just that easy. He, too, could simply will a vibrant economy into being through sheer intellectual force.

In New Zealand, the hubristic fantasy probably began with Muldoon—with the expansion of government activity under his stewardship, the excessive regulation of everything in which government itself was not already active, and the idea that if he just pulled the right levers we’d enter Nirvana with just a tinker or two needed on the Think Big handle.

In the eyes of Helen Kelly and many others (John Key not excluded), we are still in those days in which the government is the largest employer in the land, and it can “pledge” to “create” more jobs. 

But this is bollocks.

Government can certainly stop the creation of new jobs by over-taxing investors and excessive regulation on businesses and capital formation. And it has. It can crowd out the creation of new private employment (which actually grows production) by excessive spending on its own behalf (which is just consumption spending growing nothing more than beneficiaries with a bad case of entitle-itis (the likes of Fletcher Building not excluded). And it has.  It can stop the shaking out after the crash of malinvestments by bailing out failures, and it has; and it can hinder the rebalancing of investment into more profitable lines by offering “stimulus” for things profitable only because of the injection of Other People’s Money. And it does.

Which is why Helen Kelly is right to recognise “the economy is collapsing.”

It is.

But not for a lack of government activity, but a surfeit.

The only way new jobs can be created under a government’s watch—the only thing a government can actually pledge to do that would have any effect—is to get the hell out of the way.

But I doubt the hidebound ideologically straitjacketed president of the Council of Trade Unions would endorse that any time soon.

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1 Comments:

Anonymous Anonymous said...

"The only way new jobs can be created under a government’s watch—the only thing a government can actually pledge to do that would have any effect—is to get the hell out of the way."

This is so true - but the tragedy is that we have become so sheeple-like that people's background view on life is that the government should always 'fix it'. But governments cannot MAKE anything happen.... they can only PREVENT things from happening, and they do this by barraging us with regulations and red (or green) tape.

I think what happens is the government hopes that they can force the economy to develop in a certain direction by grants, sweeteners and regulations. When this fails they introduce more of the same but aimed in a different direction and when this fails they pile on even more. And more. And more, until the market for a company's goods and the bullshit regulatory hurdles are so fucked that it's just not worth continuing.

This doesn't only happen at the economic level either. I volunteered for many years for a voluntary social agency with an enviable standard of professionalism (even though staffed by volunteers). Then along came the government with its almost unlimited funds of stolen taxpayers' money. They invented solutions for fake social problems which didn't exist, funded us to pretend to deal to these and ended up colonising a hugely expanded operation which now became a jargon infested government bureaucracy. Nothing is safe from the government now... they are here to 'help' us.....!

Dave Mann

9/09/2012 09:07:00 am  

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